In the absence of functioning institutions in North KoreaвЂ™s ambiguously marketised economy, people buying and selling goods have developed a number of coping strategies in a bid to enforce contracts, minimise uncertainty, improve access to information and increase trust. North KoreaвЂ™s COVID-19 border closure is likely to have other long-term effects. In effect, politically connected traders may be able to start trading soon, but the politically marginalised will continue to suffer and hunger will persist among the general population. North Korean authorities have been cracking down on smuggling, even as they open applications for new trading permits in anticipation of the border re-opening. It also drives an increase in inequality between the haves and have-nots, even in Pyongyang. Selectively opening border trade to allow some trade through is a good way to maintain the support of those it favours but is less effective at stabilising markets. A border that is completely closed for an indeterminate period will have deleterious effects on the positions of these elites. KimвЂ™s support has relied on providing business opportunities to political elites, particularly in international trade. North Korea also continued exporting millions of tons of coal, largely to China via illicit ship transfers and port visits, to bring in hard currency. Presumably, North Korea has enough foreign currency, or at least the equivalent in barter goods, to pay for the oil. Throughout the pandemic, North Korean and third-country flagged ships have continued ship-to-ship transfers of oil in international waters in violation of UN sanctions. At the same time, he has pursued policies that aim to centralise and consolidate political control over market participants and enterprises, as well as extract more income from these enterprises.Д®ven during the pandemic, the regime has attempted to maintain income for the state and supplies for state-controlled traders. Since coming to power, Kim has generally allowed market activity to continue because he needs the revenue such activity brings and because it supports the majority of the population. The strict border closure is both at odds and in line with the governmentвЂ™s overarching policy towards markets.

Kim Jong-unвЂ™s emphasis on fish production and aquaculture, which predates the COVID-19 border closure, suggests that he has been trying (unsuccessfully) to minimise the countryвЂ™s dependence on international trade for its basic food requirements. Despite North KoreaвЂ™s reputation as a hermit kingdom, the country is heavily reliant on imported goods to supply its markets. The key insight from North KoreaвЂ™s crisis over the past 18 months is that it is not actually economically isolated from the rest of the world. North Korean leader Kim Jong-un himself acknowledged there were food problems in the country which threatened national security. Given that Hyesan is more dependent on foreign trade for its supplies, this suggests the border closure is creating hardship in cities that do not have ready access to domestic rice supplies.Д®ven in Pyongyang and Sinuiju, where rice prices have been relatively stable - suggesting that the North Korean state may be releasing reserves of rice (possibly from military reserves) as a way of overcoming market shortages - prices were volatile in the first half of 2021. Since the border closure, rice prices in Hyesan have been consistently higher and have experienced greater volatility than in Pyongyang and Sinuiju.

Without imported goods, or the ability to bring in hard currency through exporting goods, markets have suffered shortages and volatility. In 2020, North Korean fishing fleets essentially disappeared, possibly due to concerns that movement would bring in COVID-19. ChinaвЂ™s reported trade with North Korea was down 80 per cent in 2020 from the previous year, although the first half of 2021 was a little better, potentially due to greater needs for fertiliser. Since the January 2020 border closure, there have been multiple signs of economic hardship, at least in parts of the economy that rely on imports and exports. Hard data about North Korea is difficult to come by. Even if (as North Korea claims) there is no COVID-19 in the country, North KoreaвЂ™s economy is undoubtedly doing it tough. Medicine and medical equipment are difficult to import due to sanctions, the border closure, the departure of humanitarian agencies and the lack of foreign currency. Economics, Politics and Public Policy in East Asia and the PacificД¬OVID-19 reveals North Korea is no longer a hermit kingdom 23 August 2021ДЄuthor: Justin Hastings, University of SydneyДЄny spread of COVID-19 in North Korea will prove disastrous.

North korea currency